XOX

Annual
Report
2014
XOX Bhd (900384-X)
Contents
Corporate Information ............................................................................................................... 2
Profile of Directors and Chief Executive Officer ........................................................................ 4
Chairman's Statement ............................................................................................................... 8
Event Highlights ....................................................................................................................... 10
Awards and Achievements ...................................................................................................... 13
Plans/Products ......................................................................................................................... 14
Corporate Social Responsibility ............................................................................................... 17
Statement on Corporate Governance ..................................................................................... 18
Audit Committee Report.......................................................................................................... 26
Statement on Risk Management and Internal Control............................................................ 31
Statement of Directors' Responsibility .................................................................................... 33
Other Compliance Disclosures ................................................................................................. 34
Financial Statements ................................................................................................................ 36
Analysis of Shareholdings ...................................................................................................... 110
Notice of Annual General Meeting ........................................................................................ 112
Form of Proxy ................................................................................................................ Enclosed
XOX Bhd (900384-X) Annual Report 2014
Corporate Information
Board of Directors
Dato Seri Abdul Azim bin Mohd Zabidi
Non-Independent Non-Executive Chairman
Faidzan bin Hassan

Independent Non-Executive Director
Datuk Chai Woon Chet

Managing Director
Cheong Wai Loong

Soo Pow Min

Hew Tze Kok

Khoo Chuin Yuen

Datuk Lor Chee Leng

Audit Committee
Faidzan bin Hassan
Chairman
Soo Pow Min

Khoo Chuin Yen
Nomination and Remuneration Committee

Cheong Wai Loong
Chairman
Soo Pow Min

Khoo Chuin Yen
Company Secretaries
Tan Tong Lang (MAICSA 7045482)
Chong Voon Wah (MAICSA 7055003)
Principal Bankers
Ambank (M) Berhad (8515-D)
Public Bank Berhad (6463-H)
Hong Leong Bank Berhad (97141-X)
Corporate Information
Registered Office
Suite 10.03, Level 10, The Gardens South Tower

Mid Valley City, Lingkaran Syed Putra
59200 Kuala Lumpur
Telephone: (03) 2279 3080 Facsimile: (03) 2279 3090
Business Office
31-3, Block C, Jaya One

72A, Jalan Universiti
46200 Petaling Jaya
Selangor Darul Ehsan
Auditors
UHY
Suite 11.05, Level 11
The Gardens South Tower
Mid Valley City
Lingkaran Syed Putra
Share Registrar
Shareworks Sdn Bhd (229948-U)

No 2-1, Jalan Sri Hartamas 8
Sri Hartamas
50480 Kuala Lumpur
Listing
ACE Market of Bursa Malaysia Securities Berhad

Stock Name: XOX
Stock Code: 0165
Website
www.xox.com.my
Profile of Directors and Chief Executive Officer

Dato Seri Abdul Azim bin Mohd Zabidi, a Malaysian aged 55, is the Non-Independent NonExecutive Chairman of the Company having been appointed to the Board on 30 June 2010.
He graduated with a Master of Arts in Business Law from the London Metropolitan
University, United Kingdom in 1983. He is also a Fellow of The Chartered Institute of
Secretaries, United Kingdom.
He was Chairman of Bank Simpanan Nasional (BSN), Malaysias National Savings Bank. The
Bank, which is a Government entity charged with inculcating the savings habit amongst
Malaysians, has more than US$3.0 billion in assets and during his 10 years as Chairman of
BSN, has seen a steady improvement in operating profits.
Growing from his work with BSN, he is also active in the work undertaken by the Brussels
based World Savings Banks Institute (WSBI). In 2000, he was appointed President (Asia
Pacific) for WSBI and in 2003, he was elevated to its Board of Directors. He was elected as
Vice President and Treasurer of WSBI from September 2006 until April 2009.
A long association with the unit trusts/mutual funds and fund management industry
culminated in his election as President of the Federation of Malaysian Unit Trust Managers,
a post he held from 1998 to 2003. During this period, he was appointed Member of the
Steering Committee of the International Investment Funds Association (IIFA), Montreal,
Canada, a post he held until 2008. From 2007 to 2008, he was elected a member of the
Board of Directors and Chairman of the Audit Committee of IIFA.
Dato Seri Abdul Azim also sits on the Board of Directors of Timberwell Berhad and WangZheng Berhad.
Datuk Chai Woon Chet
Datuk Chai Woon Chet, a Malaysian aged 36, was appointed to the Board on 13 January
2014 as Managing Director. He graduated with a Diploma in Business Economics (KDU).
He was a Marketing Manager of Sanbumi Sawmill Sdn. Bhd. (a wholly-owned subsidiary of
Sanbumi Holdings Berhad which is listed on the Main Board of Bursa Malaysia). He had been
involved in the timber business industry with buyers from Japan, Europe, South Africa and
Korea for the past 8 years.
He also has extensive experience in property development, construction and the
automotive sector.
Datuk Chai Woon Chet also sits on the board of directors of Astral Supreme Berhad and
various other private companies.

Soo Pow Min
Soo Pow Min, a Malaysian aged 49, was appointed to the Board on 30 June 2010 as a NonIndependent Non-Executive Director and was redesignated on 5 January 2012 to an
Independent Non-Executive Director. He graduated in 1990 with a Bachelor of Architecture
in Structural Engineering from the University of Illinois, Chicago, United States of America.
He started his career in 1990 with YTL Corporation Berhad as an Architect and was
responsible for overseeing the architectural work of the company. In 1994, he founded
Urban Builder as a sole proprietorship but subsequently ceased business in 1999 when he
was appointed Director of Pembinaan Wincon Sdn Bhd, a position which he held to date. In
2009, he founded DP Land Sdn Bhd and has been the Director of DP Land Sdn Bhd since.
Mr Soo is presently the Member of the Audit Committee and Nomination and
Remuneration Committee of the Company.
Khoo Chuin Yuen
Khoo Chuin Yuen, a Malaysian aged 40, was appointed to the Board on 29 September 2011, as
an Independent Non-Executive Director. He graduated with a Bachelor of Finance from the
University of New Orleans, United States of America.
He started his career as a Credit and Marketing Executive in MBF Finance Bhd in 1997. In
1999, he joined Citibank Berhad as a management associate and within three years, became
the Manager of Mortgage Sales & Share Margin Financing. From 2004 to 2007, he worked in
Prudential Fund Management Bhd, beginning as the Senior Regional Manager of Northern
Region, before being promoted to be the Director of Marketing & Communications in 2006,
and Chief Retail Marketing Officer in 2007.
He was subsequently Chief Executive Officer & Acting Chief Investment Officer of InterPacific Asset Management Sdn Bhd from January 2008 to February 2009.
From November 2009 to date, he is the Chief Executive Officer of Standard Financial Planner
Sdn Bhd.
He is presently the Member of the Audit Committee and Nomination and Remuneration
Committee of the Company.
Faidzan bin Hassan
Faidzan bin Hassan, a Malaysian aged 54, was appointed to the Board on 4 July 2012, as an
Independent Non-Executive Director. He graduated with an Advanced Diploma in
Accounting from the University Institute Technology Mara.

He was the Executive Director of Innosabah Securities Sdn Bhd from 1992 to 2000. Since
1995, he has been the principal partner/trustee of Sititrust & Administrators Limited, and
since 2003, the Deputy Chairman of KIC Oil & Gas Ltd and the KIC Group of Companies.
Encik Faidzan is presently the Chairman of the Audit Committee of the Company.
Cheong Wai Loong
Cheong Wai Loong, a Malaysian aged 42, was appointed to the Board on 30 September 2013
as an Independent Non-Executive Director. Mr Cheong graduated with a Bachelor Degree in
Business Accounting & Finance, is a Fellow Member of The Institute of Public Accountants
Australia and a member of the National Institute of Accountants, Australia.
Mr Cheong is one of the pioneer shareholders of XOX Bhd who helped the Company open
its first branch in Malaysia upon listing on Bursa Malaysia Securities Berhad and launching of
the "Go Green recycling project".
He is currently the Managing Director of Linear Design Sdn Bhd, a multi-award winning
Interior Architecture Firm for some of the major developers in Malaysia and he also sits on
the Boards of numerous private companies.
Mr Cheong is the Chairman of the Nomination and Remuneration Committee of the
Company.
Hew Tze Kok
Hew Tze Kok, a Malaysian aged 37, was appointed to the Board on 21 October 2013 as an
Independent Non-Executive Director. Mr Hew is a fellow member of the Association of
Chartered Certified Accountants (FCCA).
He started his career path by practising in accounting firms, namely Wong Yew Seng & Co
and BDO Binder for approximately 7 years. Thereafter he served the Securities Commission
Malaysia (SC) for approximately 5 years in the area of enforcement of securities law. He
was then appointed as an Investigating Officer of the SC with a ranking of Senior Manager.
Subsequent to that, he joined KPMG Forensic Investigation Services as an Associate
Director. Currently, Mr Hew also sits on the board of directors of Asia Bioenergy
Technologies Berhad as Independent Non-Executive Director.
Datuk Lor Chee Leng
Datuk Lor Chee Leng, a Malaysian aged 50, was appointed to the Board on 19 March 2014 as
an Independent Non-Executive Director. He graduated with a Bachelor degree from the
National University of Singapore.
Datuk Lor was previously the Group CEO of EON Bank Group, Malaysia. Under his
leadership, EON Bank Group recorded many notable product innovations and financial
achievements. Most significant was the transformation of the banking group from being

previously perceived as a non-descript player in the industry to being regarded as a rapidly
growing bank and one of the most talked about in the country. EON Bank Group was
awarded the Asias Best Employer Brand Malaysia in 2011 and was ranked 337 in the
Top 500 Most Valuable Global Banking Brands by Brand Finance Plc.
Before joining EON Bank, he was the Worldwide Director for Banking Solutions with Hewlett
Packard Asia Pacific, and prior to that he was the EVP and Head of Consumer Banking for
RHB Bank Malaysia.
Prior to returning to Malaysia in 2004, he was a Managing Director with DBS Bank (a leading
bank in SEA) for 17 years, serving in various senior management capacities in both their
Singapore and Thailand operations.
He has more than 25 years of senior level banking experience with extensive focus in retail
banking, strategy formulation, business transformation, sales and marketing; and human
capital development in various SEA countries.
He has previously, also served as a Director of the Malaysia Electronic Payment System
(MEPS) Berhad as well as a member of the EMVCo Global Board of Advisors.
Ng Kok Heng
Chief Executive Officer
Ng Kok Heng, a Malaysian aged 51, is the Chief Executive Officer of the Company. He
graduated with a Bachelor of Computer Science (Honours) from the Universiti Sains
Malaysia, Penang in 1987. Mr Ng was appointed as Managing Director and Chief Executive
Officer of the Company on 30 June 2010. On 9 December 2013, he retired as Managing
Director of the Company but continue to serve the Company as Chief Executive Officer of
the Company.
He started his career in 1987 as a Sales Manager in Communications Technology Sdn Bhd
and was in charge of sales and marketing. In 1992, he was appointed Executive Director for
MTL Communications Sdn Bhd and was responsible for the marketing, sales and business
development of the company. Subsequently in 2000, he joined Wilco Systems Sdn Bhd as
the Managing Director and was responsible for the performance as well as the day-to-day
operations of the company.
He was also a consultant to Teligent AB, Sweden, a telecommunications provider and has
worked with key players in various South East Asian countries such as Telekom Malaysia
Berhad, Singapore Telecommunications Limited and Smart Communications Inc. He leads
highly specialised teams of IT integrators and implementers to implement systems for
telecommunications providers.
Note :
The Directors do not have any family relationship with any other Directors and/or major shareholders of the
Company. The Directors do not have any conflict of interest with the Company and have no conviction for
any offences, other than traffic offences, if any, within the past ten (10) years.
Chairmans Statement
On behalf of the Board of Directors, I am pleased to present to you the Annual Report of the
Group and Company for the financial year ended 30 June 2014.
Financial Performance
The Group continued to operate in a challenging environment with intense competition
from incumbent and new operators as well as having to deal with the increased use of
smartphones and mobile applications which have led to lower industry wide Average
Revenue Per User (ARPU) from traditional voice and short message service (SMS).
Despite the difficult business environment, the Group continued to make inroads in its
quality subscriber acquisition programmes. At the end of June 2014, the Group had around
246,000 active subscribers, an increase from about 143,000 at the end of June 2013. This
represented an increase in active subscribers by 72%. Following from this and coupled with
the various programmes to improve our brand image and subscriber retention, the Group
recorded higher revenues of RM57.0 million during the financial year compared to RM40.8
million in the previous financial period, an improvement by 39% year-on-year.
Despite the improvement in revenues, the Group recorded a Net Loss for the year of
RM1.60 million compared to a Profit for the year of RM4.5 million for the year ended June,
2013. The major reason for this was the inclusion of a one-off discount of RM10 million
under our Cost of Sales for the year ended June, 2013 which was granted by the Groups
trade creditor. If the effect of this discount were to be excluded, the Groups loss after
taxation for the year ended June, 2013 would have been RM5.5 million. This compares
favourably to the current financial years Net Loss of RM1.6 million.
The Group also managed to recover RM1.96 million of trade receivables which were
impaired during the previous financial year and this led to a contribution to the increase in
Other Income.
Notwithstanding the higher income figures, the loss position was attributed to the offsetting of higher selling and distribution expenses from various programmes initiated to
improve the Groups brand awareness, subscriber acquisition and retention. In addition,
the Groups administrative expenses also increased mainly due to higher depreciation
expenses from increased telecommunication network and equipment assets and various
other expenses such as rental, corporate expenses and also human resources.
Industry Trend and Development
In Bank Negara Malaysias Quarterly Bulletin for the second quarter of 2014, it was reported
that the growth for the communication sub-sector remained robust at 10% growth for the
first half of 2014, driven by strong demand for data communication services.
The growth in demand for data services is expected to lead to lower demand for traditional
mobile services such as voice, SMS and multimedia messaging service (MMS). This is
because more consumers will be able to use the widely available mobile applications such as
Chairmans Statement
WhatsApp, Viber, Skype, Line and many others to enjoy low or no cost voice, SMS and MMS
services.
Based on the foregoing, we anticipate another difficult year although your Board of
Directors have taken steps to reduce costs further in order for the Group to register
favourable results for the coming years.
Future Prospects
The Group remains committed in maintaining its focus on introducing innovative products
and services to expand our subscriber base in accordance with the fast changing trends in
the mobile telecommunications industry.
In view of the changing consumer behaviour in using more data services we have realigned
and planed our Groups focus to ensure that it is in line with current consumer trends. The
Groups plans include additional promotion and enhancements on data plans, subscriber
growth from the Groups SIM-free mobile application brand named Voopee, online
promotion and activities to promote focussed advertising and branding messages to target
customers.
The Groups financial performance is dependent on the growth of its subscriber base and
the average monthly revenue from the sales of recharge vouchers per subscriber. We
expect the Group to continue to make headway in the acquisition of subscribers through the
various initiatives launched and planned to be launched.
Appreciation
Lastly, we would like to offer our sincere gratitude and appreciation to our shareholders,
customers, business associates, bankers and government authorities for their continued
support. I would also like to express the Boards, and my, special thanks to our major
creditor for their relentless backing and encouragement.
My appreciation is also extended to members of the Board of Directors for their guidance
and wisdom in steering the company during these difficult period. The Board of Directors
would also like to place on record our appreciation to our valued employees for their
continuing commitment and dedication to the Group.

Non-Independent Non-Executive Chairman
Event Highlights
10
Event Highlights
11
Event Highlights
12
Awards and Achievements
13
Plans/Products
14
Plans/Products
15
Plans/Products
16
Corporate Social Responsibility

In pursuit of any business objective, the Group needs to strike a balance between
profitability and social responsibilities. The group is committed and uses its best endeavour,
on an on-going basis to integrate corporate social responsibility practices into its day to day
business operations.
During the financial year, the Group has undertaken the following activities:
17
Statement on Corporate Governance

The Board of Directors (the Board) of XOX Bhd (XOX or the Group or the Company)
strives to ensure good corporate governance practices are implemented and maintained
throughout the Company and its subsidiaries (Group) as a fundamental part of discharging
its duties to enhance shareholders values consistent with the principles and best practices
set out in the Malaysian Code on Corporate Governance (the Code). The Board will
continuously evaluate the Groups corporate governance practices and procedures, and
where appropriate will adopt and implement the best practices as enshrined in the Code to
the best interest of the shareholders of the Company.
The statement below sets out the manner in which the Group has applied the key principles
and the extent of its compliance with the best practices set out in the Code throughout the
financial year under review pursuant to Rule 15.25 of the ACE Market Listing Requirements
of Bursa Malaysia Securities Berhad (Bursa Securities) (Listing Requirements).
A.
Board of Directors
The Board assumes responsibility for leading and controlling the Group. The Board has the
overall responsibilities for corporate governance, risk management, internal controls,
strategic direction, succession planning, formulation of policies and overseeing the
investment and business of the Group.
In carrying out its functions, the Board has delegated specific responsibilities to two (2)
Board Committees, namely Audit Committee and Nomination and Remuneration
Committee. These committees have the authority for their own specific issues and their
recommendations are reported back to the Board.
A.1
Board Balance
The current Board of Directors consists of eight (8) members, comprising a NonIndependent Non-Executive Chairman, one (1) Executive Director who is also the Managing
Director and six (6) Independent Non-Executive Directors. The Company thus complies with
Rule 15.02 of the Listing Requirements whereby at least two (2) or one-third (1/3) of the
Board of Directors, whichever is higher, are independent directors.
There is a clear division of responsibilities between the Chairman of the Board and the Chief
Executive Officer to ensure that there is a balance of power and authority. The Chairman is
responsible for running the Board and ensuring that all Directors receive sufficient and
reliable information on financial and non-financial matters to enable them to participate
actively in Board decisions whilst the Chief Executive Officer is responsible over the
operating units, organisation effectiveness and implementation of the Boards policies and
decisions.
The size and composition of the Board reflects a balance of executive and non-executive
directors who are reputable and professional person of calibre in the business environment
to provide leadership and exercise control of the Group. The Independent Non-Executive
Directors of the Company play a key role in providing unbiased and independent views,
advice and contributing their knowledge and experience toward the formulation of policies
18

and in the decision making process. The Board structure ensures that no individual or group
of individuals dominates the Boards decision-making process. Although all the Directors
have equal responsibility for the Company and the Groups operations, the role of the
Independent Directors are particularly important in ensuring that the strategies proposed by
the Executive Directors are deliberated on and have taken into account the interest, not
only of the Company, but also that of the shareholders, employees, customers, suppliers
and the community.
The Board has yet to identify a Senior Independent Non-Executive Director to whom
concerns may be conveyed by shareholders and the general public. However, the Chairman
of the Board encourages the active participation of each and every Board member in the
decision making process.
A.2
Board Charter
As part of governance process, the Board has formalised and adopted the Board Charter.
This Board Charter sets out the composition and balance, roles and responsibilities,
operation and processes of the Board and is to ensure that all Board members acting on
behalf of the Company are aware of their duties and responsibilities as Board members.
A copy of the Board Charter is available at the Companys website.
A.3
Board Meetings and Supply of Information to the Board
Board meetings are held regularly and the details of the attendance during the financial year
ended 30 June 2014 are as follows:
Name of Directors
Soo Pow Min
Khoo Chuin Yuen
Faidzan bin Hassan
Cheong Wai Loong (Appointed on 30/09/2013)
Hew Tze Kok (Appointed on 21/10/2013)
Datuk Chai Woon Chet (Appointed on 13/01/2014)
Datuk Lor Chee Leng (Appointed on 19/03/2014)
Ng Kok Heng (Retired as Managing Director on 09/12/2013)
Yeah Eng Kong (Resigned on 01/11/2013)
No. of Meetings
Attended
6/9
9/9
7/9
7/9
6/6
5/6
4/4
1/2
5/5
4/5
The Directors have full and timely access to all information pertaining to the Groups
business and affairs to enable them to discharge their duties. Senior management are
invited to attend the Board meetings to explain and clarify matters as required.
Prior to the Board meetings, the agenda for every meeting together with a full set of Board
papers containing information relevant to the business of the meetings are circulated to the
Directors for their perusal in advance before the meeting date. This is to allow the Directors
19

to have sufficient time to review and consider the agenda items before the meeting and to
obtain further explanations or clarifications, where necessary.
The proceedings and resolutions reached at each Board meeting are documented in the
minutes and signed by the Chairman of the next Board meeting. Besides Board meetings,
the Board exercises control on matters that require Boards approval through circulation of
Directors Resolutions. These documents are kept at the registered office.
All Directors have direct access to the advice and services of the Company Secretary who is
responsible for ensuring the Boards meeting procedures are adhered to and that applicable
rules and regulations are complied with. The Board recognises that the Company Secretary
is suitably qualified and capable of carrying out the duties required. The Board is satisfied
with the service and support rendered by the Company Secretary in discharge of their
functions. When necessary, Directors may whether as a full Board or in their individual
capacity, seek independent professional advice, including the internal and external auditors,
at the Companys expense to enable the directors to discharge their duties with adequate
knowledge on the matters being deliberated.
A.4
Re-election of Directors
In accordance with the Companys Articles of Association, at the first Annual General
Meeting (AGM) of the Company, all the Directors shall retire from office, and at the AGM
in every subsequent year, an election of directors shall take place and one-third (1/3) of the
Directors (including the Managing Director) for the time being, or if their number is not
three (3), or a multiple of three (3), then the number nearest to one-third (1/3) with a
minimum of one (1) shall retire from office and be eligible for re-election PROVIDED
ALWAYS that all Directors including a Managing Director shall retire from office at least once
in every three (3) years but shall be eligible for re-election. A retiring Director shall retain
office until the close of the meeting at which he retires and shall be eligible for re-election.
Any Director appointed during the year is required to retire and seek re-election by
shareholders at the first AGM following his appointment. Directors over seventy (70) years
of age are required to submit themselves for re-appointment annually in accordance with
the Section 129 (6) of the Companies Act, 1965.
A.5
Nomination and Remuneration Committee
In line with the Best Practices of the Code, the Board has established a Nomination and
Remuneration Committee which comprise exclusively of Independent Non-Executive
Directors.
The present members of the Nomination Committee of the Company are:
Chairman
Cheong Wai Loong
20

Members
Soo Pow Min (Independent Non-Executive Director)
Khoo Chuin Yen (Independent Non-Executive Director)
The functions of the Nomination and Remuneration Committee are summarise as following:
a) The Committee shall regularly review the structure, size and composition of the
Board and make recommendations to the Board with regard to any adjustments that
are deemed necessary;
b) The Committee has to evaluate the effectiveness of the Board as a whole, the
various Committees and each individual Directors contribution to the effectiveness
on the decision making process of the Board;
c) The Committee shall give full consideration to succession planning for Directors and
other senior executives in the course of its work, taking into account the challenges
and opportunities facing the company, and the skills and expertise needed on the
Board in the future;
d) The Committee shall prepare a description of the role and capabilities required for a
particular appointment;
e) The Committee shall be responsible for identifying and nominating for the approval
of the Board, candidates to fill board vacancies as and when they arise;
f) In determining the process for the identification of suitable new candidates, the
Committee will ensure that an appropriate review or search is undertaken by an
independent third party to ensure the requirement and qualification of the
candidate nominated;
g) The Committee shall make recommendations to the Board on candidates it considers
appropriate for appointment; and
h) The Committee shall recommend to the Board concerning the re-election by
shareholders of any director under the retirement by rotation provisions in the
Companys Article of Association.
i) The Committee shall review and recommend to the Board the framework of
remuneration of the Executive Directors and Senior Management, taking into
account the performance of the individual, the inflation price index and information
from independent sources on the rates of salary for similar jobs in selected group of
comparable companies.
j) The Committee shall review and determine the bonus scheme for Executive
Directors depending on various performance measurements of the Group.
21

k) The Committee shall review and determine the other benefits in kind for the
Executive Directors.
l) The Committee may request management or external consultants to provide
necessary information upon which the Board may make its assessment.
** Subject to shareholders approval in the general meeting, the Board as a whole determines the level of
remuneration of the Non-Executive Director of the Company. The review of the remuneration of the
Non-Executive Director should take into consideration fee levels and trends for similar positions in the
market, time commitment required from the director and any additional responsibilities undertaken
such as a director acting as chairman of a board committee or as the senior independent nonexecutive director. The individuals concerned should abstain from discussion of their own
remuneration.
A.6
Directors Training
All the Directors appointed to the Board have completed the Mandatory Accreditation
Programme as prescribed by the Listing Requirements of Bursa Malaysia Securities Berhad.
The Directors remain committed to undergoing further continuing education training
programmes to upgrade and enhance their business acumen and professionalism in
discharging their duties to the Group.
The following Board members have attended several relevant courses/seminars during the
financial year ended 30 June 2014 as detailed below:
Name of Director
Courses Attended
Dato Seri Abdul Azim bin Directors Effectiveness and Responsibility on New
Mohd Zabidi
Guidelines
Investing in Vietnam Opportunities and Challenges
Corporate Compliance: Focussing on Directors' Duties,
Liabilities and Expectations
Khoo Chuin Yuen
Soo Pow Min
Faidzan bin Hassan
Cheong Wai Loong
Hew Tze Kok
Datuk Chai Woon Chet Corporate Compliance: Focussing on Directors' Duties,
(Appointed
on Liabilities and Expectations
13/01/2014)
Saved as disclosed above, Datuk Lor Chee Leng, an Independent Non-Executive Director
appointed on 19 March 2014, was not able to attend any Directors training during the
financial year due to overseas travelling and his busy work schedule. However, he has kept
22

himself abreast on financial and business matters through readings to enable him to
contribute to the Board. He is also aware of the duties and responsibilities and will continue
to undergo other relevant training programmes to keep abreast with new regulatory
developments and requirements in compliance with the Listing Requirements on continuing
education.
A.7
Reinforce Independence
The Non-Executive Directors are not employees of the Group and do not participate in the
day to day management of the Group. The Non-Executive Directors are independent
directors and are able to express their views without any constraint. This strengthens the
Board which benefits from the independent views expressed before any decisions are taken.
The Nomination and Remuneration Committee has reviewed the performance of the
independent directors and is satisfied they have been able to discharge their responsibilities
in an independent manner.
None of the current independent board members had served the company for more than
nine (9) years as per the recommendations of the Code. Should the tenure of an
Independent Director exceed nine (9) years, shareholders approval will be sought at a
General Meeting or if the services of the director concerned are still required, the director
concerned will be re-designated as a Non-Independent Director.
B.
Directors Remuneration
The determination of the remuneration for Non-Executive Directors is decided by the Board
as a whole. The remuneration of Executive Directors is the purview of the Nomination and
Remuneration Committee who will evaluate and recommend to the Board. Individual
directors concerned have abstained from discussing and deciding on their own
remuneration.
The Directors fee including Non-Executive Directors if any, have to be endorsed by the
Board and would seek approval from the shareholders of the Company at the Annual
General Meeting. The compensations for Non-Executive Directors are linked to their
experience and level of responsibility taken.
23
B.1
Details of Directors Remuneration
The details of directors remuneration for the financial year ended 30 June 2014 are as
follows:
Category
Executive
Directors
Non-Executive
Directors
Total
Fee
RM
Salaries
RM
Allowances
RM
Total
RM
489,109
36,500
525,609
489,109
325,200
361,700
325,200
850,809
The Directors remuneration within the following bands is as follows:

Range of Remuneration
Below RM50,000
RM50,001 RM100,000
RM350,001 RM400,000
Number of Executive
Directors
2
Number of NonExecutive Directors

5
3
-
The above includes directors who have resigned during the financial year.
The Board is of the view that the detailed remuneration disclosure of each director is not disclosed as the
information will not add significantly to the understanding and evaluation of the Groups corporate
governance.
C.
Communication with Shareholders and Investors
C.1
Relationship with Shareholders
The Board recognises the need for transparency and accountability to the Companys
shareholders as well as regular communication with its shareholders, stakeholders and
investors on the performance and major developments in the Company. The Company
ensures that timely releases of the quarterly financial results, press releases and corporate
announcements are made to its shareholders and investors, which are clear, unambiguous,
succinct, accurate and contains sufficient and relevant information.
The Group also maintains a website www.xox.com.my whereby information can be
obtained.
The Companys Annual Report and financial results are dispatched on annually basis to the
shareholders to provide an overview of the Groups business activities and performances.
The Share Registrar is available to attend to administrative matters relating to shareholders
interests.
24
C.2
Annual General Meeting
The Annual General Meeting (AGM) represents the principal forum for dialogue and
interaction with all the shareholders of the Company. At the AGM, the Board provides
opportunities for shareholders to participate in the question and answer session where all
Directors as well as the external auditors are present to respond to the shareholders
questions during the AGM. The Company values feedback from its shareholders and
encourages them to actively participate in discussion and deliberations.
D.
Accountability and Audit
D.1
Financial Reporting
The Board has a responsibility and aims to provide and present a fair and balanced
assessment of the Groups financial performance and its prospects. The financial statements
of the Company are drawn up in accordance with the requirements of the applicable
accounting standards in Malaysia and provision of the Companies Act, 1965.
With assistance from the Audit Committee, the Board oversees the Groups financial
reporting processes and the quality of its financial reporting.
D.2
Internal Control
The Board is overall responsible for maintaining a sound system of internal controls and risk
management practises to safeguard shareholders investment and Groups assets. The
Statement on Risk Management and Internal Control as set out on page 31 of the annual
report provides an overview of the state of internal controls within the Group.
D.3
Relationship with Auditors
Through the Audit Committee, the Group has established a transparent and appropriate
relationship with the Groups auditors, in seeking professional advice and ensuring
compliance with the applicable accounting standards and statutory requirements in
Malaysia. From time to time, the auditors will highlight to the Audit Committee and the
Board of Directors on matters that require the Audit Committees and Boards attention and
action. The Audit Committee has been explicitly accorded the power to communicate
directly with both the External Auditors and Internal Auditors. Annual appointment or reappointment of the external auditor is via shareholders resolution at the AGM on the
recommendation of the Board.
E.
Statement of Compliance with the Code
The Board is committed to ensure high standards of corporate governance and to their best
ability and knowledge complied with the Best Practices set out in the Code.
25
Audit Committee Report

1
Members of the Audit Committee
The Board has established a Audit Committee to assists the Board in fulfilling its fiduciary
responsibilities relating to corporate accounting, financial reporting practices, system of
internal control, the audit process and the process of monitoring compliance with laws and
regulations.
The members of Audit Committee shall be appointed by the Board from amongst the
Directors of the Company and shall comprise of at least three (3) members, all of whom
must be Non-Executive Directors, with a majority of them being independent. The Board
shall at all the times ensure that at least one (1) member of the Audit Committee:
i)
ii)
iii)
must be a member of the Malaysian Institute of Accountants (MIA); or

if he is not a member of the MIA, he must have at least three (3) years' working
experience and:
a) passed the examinations specified in Part I of the First Schedule of the
Accountants Act 1967; or
b) must be a member of one of the associations of accountants specified in Part II of
the First Schedule of the Accountants Act 1967; or
fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities
Berhad (Bursa Securities).
No alternate director shall be appointed as a member of the Audit Committee. The

members of the Audit Committee shall elect a Chairman from among their number who
shall be an Independent Director. The term of office and performance of the Audit
Committee and each of its members shall be reviewed by the Board at least once every
three (3) years to determine whether the members have carried out their duties in
accordance with their terms of reference.
If a member of the Audit Committee resigns or for any other reason ceases to be a member
with the result that the number of members is reduced to below three (3), the Board shall,
within three (3) months from the date of that event, appoint such number of new members
as may be required to make up the minimum number of three (3) members.
The Company Secretary or his nominee or such other persons authorised by the Board shall
act as the Secretary of the Audit Committee.
The present members of the Audit Committee are as follows:
Designation
Chairman
Member
Member
26
Name
Faidzan bin Hassan
Soo Pow Min
Khoo Chuin Yuen
Directorship

2
Functions of the Audit Committee
The Audit Committee assists the Board in discharging its oversight responsibilities. The
objectives of the Audit Committee are to provide an additional assurance to the Board by
giving objective and independent reviews of the financial, operational and administrative
controls and procedures, establishing and maintaining internal controls and reinforce the
independence of the external auditors, ensuring that the auditors have free reign in the
audit process. The Audit Committee shall, amongst others, discharge the following
functions:
(a)
Review the following and report the same to the Board of Directors of the Company:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
27
with the external auditors, the audit plan, the nature and scope of work and
ascertain that it will meet the needs of the Board, the shareholders and
regulatory authorities;
with the external auditors, their evaluation of the quality and effectiveness of
the entire accounting system, the adequacy and integrity of the internal control
system and the efficient of the Groups operations;
with the external auditors, their audit report;
the assistance given by employees of the Group to the external and internal
auditors;
the adequacy of the scope, functions, competency and resources of the internal
audit function and that it has the necessary authority to carry out its work
including inter-alia the appointment of internal auditors;
the internal audit programme, processes and results of the internal audit
programme, processes, major findings of internal investigation and
Managements response and whether or not appropriate action is taken on the
recommendations of the internal audit function;
review any appraisal or assessment of the performance of members of the
internal audit function;
the quarterly results and annual financial statements prior to the approval by
the Board of Directors, focussing particularly on:
i. changes in or implementation of major accounting policies and
practices;
ii. significant and unusual events;
iii. significant adjustments arising from the audit;
iv. compliance with accounting standards, other statutory and legal
requirements and the going concern assumption;
v. the accuracy and adequacy of the disclosure of information essential
to a fair and full presentation of the financial affairs of the Group.
any related party transactions and conflict of interest situations that may arise
within the Company or the Group and any related parties outside the Group
including any transaction, procedure or course of conduct that raises questions
of management integrity;
any letter of resignation from the external auditors of the Company;
whether there is any reason (supported by grounds) to believe that the
Companys external auditors are not suitable for re-appointment; and

(xii) any significant audit findings, reservations, difficulties encountered or material
weaknesses reported by the external and internal auditors, particularly any
comments and responses in Management letters as well as the assistance given
by the employees of the Group in order to be satisfied that appropriate action is
being taken.
(b)
Recommend the nomination of a person or persons as external auditors and the

external audit fee.
(c)
Promptly report to Bursa Securities on any matter reported by it to the Board of the
Company which has not been satisfactorily resolved resulting in a breach of the
Listing Requirements.
(d)
To verify the allocation of option pursuant to a share scheme for employees at the
end of each financial year and to prepare a statement verifying such allocation in the
annual reports.
(e)
Carry out any other functions that may be mutually agreed upon by the Audit
Committee and the Board which would be beneficial to the Company and ensure the
effective discharge of the Audit Committees duties and responsibilities.
(f)
To ensure the internal audit function of the Company reports directly to the Audit
Committee.
Authorities of the Audit Committee
(a)
The Audit Committee is authorised by the Board to investigate any matter within the
Audit Committees terms of reference. It shall have full and unrestricted access to
any information pertaining to the Group and shall have the resources it requires to
perform its duties. All employees of the Group are required to comply with the
requests made by the Audit Committee.
(b)
The Audit Committee is authorised by the Board to obtain outside legal or external
independent professional advice and secure the attendance of outsiders with
relevant experience and expertise if it considers this necessary, the expenses of
which will be borne by the Company.
(c)
The Audit Committee shall have direct communication channels with the external
auditors and person(s) carrying out the internal audit function or activity.
(d)
The Audit Committee shall be able to convene meetings with the external auditors,
the internal auditors or both, excluding the attendance of other Directors and
employees of the Company, whenever deemed necessary, in order to enable the
Audit Committee and the external auditors or the internal auditors or both, to
discuss problems and reservations and any other matter the external auditors or
internal auditors may wish to bring up to the attention of the Audit Committee.
28

(e)
The Internal Auditors report directly to the Audit Committee and shall have direct
access to the Chairman of the Audit Committee on all matters of control and audit.
All proposals by Management regarding the appointment, transfer and removal of
senior staff members of the Internal Audit of the Group shall require prior approval
of the Audit Committee. The Audit Committee is also authorised by the Board to
obtain information on any resignation of internal audit staff members and provide
the staff member an opportunity to submit his reasons for resigning.
Meetings of the Audit Committee
The Audit Committee shall meet at least four (4) times in a financial year, although
additional meetings may be called at any time at the Audit Committee Chairman's
discretion. The quorum for a meeting of the Audit Committee shall consist of not less than
two (2) members, majority of whom must be Independent Directors. Other than in
circumstances which the Chairman of the Audit Committee considers inappropriate, the
Chief Financial Officer, the representatives of the internal auditors and external auditors will
attend any meeting of the Audit Committee to make known their views on any matter
under consideration by the Audit Committee or which in their opinion, should be brought to
the attention of the Audit Committee. Other Board members, employees and external
professional advisers shall attend any particular meetings upon invitation by the Audit
Committee. At least twice in a financial year, the Audit Committee shall meet with the
external auditors without the Executive Directors being present.
The Audit Committee shall report to the Board and its minutes tabled and noted by the
Board of Directors. The books containing the minutes of proceedings of any meeting of the
Audit Committee shall be kept by the Company at the registered office or the principal
office of the Company, and shall be open for inspection of any member of the Audit
Committee and the Board.
During the financial year under review, the Audit Committee held five (5) meetings and the
details of the attendance are as follows:
Members
Faidzan bin Hassan
Soo Pow Min
Khoo Chuin Yuen
5
Meeting Attendance
3/5
5/5
5/5
Summary of Activities of the Audit Committee
The Audit Committee had carried out the following activities during the financial year under
review in discharging their duties and responsibilities:
Reviewed and assessed the adequacy of the scope and functions of the Internal
Audit Plan.
Reviewed the External Audit Plan for the Company and the Group presented by the
external auditors, with the external auditors to ensure the audit scope and activities
is adequately covered.
29
Reviewed quarterly and annual financial reports for the Company and the Group
prior to submission to the Board for consideration and approval.
Reviewed and approved the proposed final audit fees for the external auditors and
internal auditors in respect of their audit of the Company and the Group.
Considered the reappointment of the external auditors.
Met with the external auditors to discuss various issues on the Company, excluding
the attendance of the executive members of the Board and management.
Reviewed related party transactions, if any, for compliance with the Listing
Requirements.
Internal Audit Activities
In discharging its duties, the Audit Committee is supported by an internal audit function
which is outsourced to an independent internal audit service company (Internal Auditor),
who undertakes the necessary activities to enable the Audit Committee to discharge its
functions effectively. The Internal Auditor is independent of the activities audited by the
external auditors. The Audit Committee has full access to the Internal Auditor and received
reports on all audits performed.
During the financial year under review, the internal audit has conducted various
assignments on a quarterly basis and made recommendations in improving the system of
internal controls to the Audit Committee. The areas internal audit covered were billing,
collection and receivables, inventory, marketing, sales, customer services and call centre
service.
The cost incurred by the Group for the internal audit function during the financial year
ended 30 June 2014 amounted to RM58,900.
30
Statement on Risk Management and Internal Control

The Code requires listed companies to maintain a sound system of internal controls to
safeguard shareholders investments and the Groups assets. The Board is pleased to include
a statement on the state of the Groups risk management and internal control during the
financial year under review. The statement is prepared in accordance with the Listing
Requirements and released Statement on Risk Management & Internal Control : Guidelines
for Directors of Listed Issuers.
Board Responsibility
The Board acknowledges its overall responsibility for reviewing the adequacy and integrity
of the Groups system of internal controls, identifying principal risks and establishing an
appropriate control environment and framework to manage risks. However, the
effectiveness of the Groups system of internal control is designed to manage rather than to
eliminate the risk of failure to achieve business objectives. Accordingly, the Groups system
of internal control can only provide reasonable but not absolute assurance against material
misstatement or loss.
The Board either directly or via the Audit Committee, have an on-going process for
identifying, evaluating and managing the significant risks of the Group with the
management.
The Board is in the midst of defining the appropriate process and personnel to provide
assurance to the Board on the effectiveness and adequacy of risk management and internal
control system. Such personnel shall be at a senior position.
Audit Committee
The Audit Committee reviews the adequacy and effectiveness of the Groups systems of
internal control as well as reviewing issues identified by the internal auditors. The Audit
Committee also ensures that there is continuous effort by management to address and
resolve areas where control weaknesses exist.
The Audit Committee reviews the quarterly results of the Group and recommends adoption
of such results to the Board before announcement to Bursa Securities is made.
Internal Audit
The Group outsources the internal audit function to an external firm. The firm is appointed
by and reports directly to the Audit Committee. Its role is to provide the Audit Committee
with regular assurance on the continuity, integrity and effectiveness of the internal control
system through regular monitoring and review of the internal control framework and
management processes.
The internal audit firm prepares audit plans for presentation to the Audit Committee for
approval wherein the scope of work encompasses management and operational audit of
functions in the Group.
31
Statement on Risk Management and Internal Control

During the financial year under review, the internal audit has conducted various
assignments on a quarterly basis and made recommendations in improving the system of
internal controls to the Audit Committee. The areas internal audit covered were fixed assets
management and monitoring, billing, collection process, payment process, inventory,
corporate governance and risk management.
Other Key Internal Control Elements
The Board meets on a regular basis to review the performance and operations of the
Group.
The Group has in place an organisational structure that is aligned to business and
operational requirements, with clearly defined lines of accountability.
Active involvement by the Managing Director and Chief Executive Officer in the day-today business operations of the Group including weekly operational and management
meetings to identify, discuss and resolve business and operational issues.
Periodic review of management accounts by key personnel including the Managing

Director and Chief Executive Officer. The management accounts are also presented to
the Board and Audit Committee during the respective meetings.
Review of the Statement by External Auditors

The external auditors have reviewed this Statement on Risk Management and Internal
Control for inclusion in the annual report of the Group for the year ended 30 June 2014 and
reported to the Board that nothing has come to their attention that causes them to believe
that the statement is inconsistent with their understanding of the process adopted by the
Board in reviewing the adequacy and effectiveness of the risk management and internal
control system.
Conclusion
For the financial year under review, there were no significant internal control deficiencies or
material weaknesses resulting in material losses or contingencies requiring disclosure in the
Annual Report. The Board is of the view that the existing system of the internal control is
adequate. Nevertheless, the Board recognises that the development of internal control
system is an ongoing process. Therefore, in striving for continuous improvement, the Board
will continue to take appropriate action plans to further enhance the Groups system of
internal control.
32
Statement of Directors Responsibility

The Directors are required to take reasonable steps in ensuring that the financial statements
of the Group are properly drawn up in accordance with the provisions of the Companies Act,
1965, applicable financial reporting standards and approved accounting standards in
Malaysia so to give a true and fair view of the state of affairs of the Group and the Company
as at the end of the financial year and of the results and the cash flows of the Group and the
Company for that year then ended.
The Directors consider that in preparing the financial statements for the financial year
ended 30 June 2014:
the Group and the Company have adopted the appropriate accounting policies and
applied them consistently;
reasonable and prudent judgements and estimates have been made; and
all applicable approved accounting standards in Malaysia have been followed.
The Directors are also responsible for ensuring that the Group and the Company maintain
accounting records that disclose with reasonable accuracy at any time of the financial
position of the Group and of the Company and which enable them to ensure that the
financial statements comply with the Companies Act, 1965.
The Directors have general responsibilities for taking such steps that are reasonably
available to them to safeguard the assets of the Group and the Company, and to prevent
and detect fraud and other irregularities and material misstatements. Such systems, by their
nature, can only provide reasonable and not absolute assurance against material
misstatement, loss or fraud.
33
Other Compliance Disclosures

1
Share Buyback
The Company did not enter into any share buyback transactions during the financial year
under review.
2
Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities were issued during the financial
year under review.
3
Depository Receipt Programme
The Company did not sponsor or participate in any depository receipt programme during
the financial year under review.
4
Imposition of Sanctions and/or Penalties
On 18 July 2014, Bursa Securities has publicly reprimanded the Company for failing to
ensure that XOXs announcement dated 30 August 2013 on the fourth quarterly report for
the financial year ended (FYE) 30 June 2013 (4th QR 2013) took into account the
adjustments as stated in the Companys announcement dated 8 November 2013 (other than
the adjustment in respect of the credit note from a trade creditor amounting to RM10
million which was received subsequent to the 4th QR 2013).
The failure to take into account the adjustment was in contravention of Rule 9.16(1)(a) of
the Listing Requirements where a listed issuer must ensure that each announcement made
is factual, clear, unambiguous, accurate, succinct and contains sufficient information to
enable investors to make informed investment decisions.
The public reprimand was imposed pursuant to Rule 16.19(1) of the Listing Requirements
after taking into consideration all facts and circumstances of the matter and upon
completion of due process.
5
Non-Audit Fee Paid to External Auditors
There was no non-audit fee paid to the external auditors of the Company and the Group for
6
Profit Guarantee
The Company does not provide any profit guarantees during the financial year under review.
7
Material Contracts and Contracts Relating to Loan
There were no material contracts or contracts relating to loan entered into by the Company
and its subsidiaries involving the interests of the Directors and major shareholders during
34
Other Compliance Disclosures

8
Status of Utilisation of Proceeds
On 25 November 2013, it was announced that the Company proposed to implement a

private placement of up to 30,200,000 new ordinary shares of RM0.10 each, representing
not more than 10% of the issued and paid-up share capital of the Company to investors to
be identified. The private placement was subsequently completed on 24 February 2014,
following the listing and quotation of 30,000,000 new shares on the ACE Market of Bursa
Securities. The proceeds of RM3,120,000 raised from this private placement exercise was
fully utilised during the financial year as follows:
Purpose
Repayment of trade creditor
Selling & marketing expenses
Private placement expenses
Proposed Utilisation Actual Utilisation

(RM'000)
(RM'000)
1,510
1,510
1,430
1,430
180
180
3,120
3,120
Variance in Results
There were no significant variance between the results for the financial year and the
unaudited results previously announced on 29 August 2014.
The Company did not release any profit estimate, forecast or projection for the financial
year.
10
Material Properties
The Group does not own any properties during the financial year under review.
11
Recurrent Related Party Transactions of a Revenue and Trading Nature (RRPT)
There was no material RRPT during the financial year under review.
35

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Annual

XOX Bhd (900384-X)

XOX Bhd (900384-X) Annual Report 2014

Faidzan bin Hassan

Datuk Chai Woon Chet

Cheong Wai Loong

Soo Pow Min

Hew Tze Kok

Khoo Chuin Yuen

Datuk Lor Chee Leng

Soo Pow Min

Nomination and Remuneration Committee

Soo Pow Min

Chong Voon Wah (MAICSA 7055003)

XOX Bhd (900384-X) Annual Report 2014

Suite 10.03, Level 10, The Gardens South Tower

31-3, Block C, Jaya One

Shareworks Sdn Bhd (229948-U)

ACE Market of Bursa Malaysia Securities Berhad

XOX Bhd (900384-X) Annual Report 2014

Profile of Directors and Chief Executive Officer

XOX Bhd (900384-X) Annual Report 2014

Profile of Directors and Chief Executive Officer

XOX Bhd (900384-X) Annual Report 2014

Profile of Directors and Chief Executive Officer

XOX Bhd (900384-X) Annual Report 2014

Profile of Directors and Chief Executive Officer

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

Dato Seri Abdul Azim bin Mohd Zabidi

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

Awards and Achievements

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

XOX Bhd (900384-X) Annual Report 2014

Corporate Social Responsibility

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

Board Meetings and Supply of Information to the Board

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

Nomination and Remuneration Committee

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance

Details of Directors Remuneration

The Directors remuneration within the following bands is as follows:

Number of NonExecutive Directors

Communication with Shareholders and Investors

Relationship with Shareholders

XOX Bhd (900384-X) Annual Report 2014

Statement on Corporate Governance